BANGALORE:  The fundamentals of taxation lie within the fact, “from each according to his capacity,” but such fundamentals don’t last any longer. There are a series of anomalies under the tax laws, for instance, a person gets relaxation upto 1.5 lakh for interest repayment on home loan when he is buying his first house while he is allowed for an unlimited exemption for the purchase of second house, which is a disincentive to the first purchase.

Suresh Surana, founder of tax advisory firm RSM Astute Consulting, said tax exemption for Leave Travel Allowance (LTA) should be provided for a block of four years. Currently, tax exemption for LTA is allowed for two years, in a block of four calendar years. "This is at a time when the income Tax Act follows the concept of 'financial year'. Now, even the Companies Act considers financial years, not calendar years. It will help stick to one standard definition of a year," added Surana.

This is not only the one anomaly in the income tax laws; there is a non uniform tax treatment for all investors and when it comes to investments in bonds, there is a lot of variation for entities.

SEBI Chairman U K Sinha focused on to the formation of a policy and removal of the existing anomalies in the Bond Market. "All that we have asked the government is that try and reconcile it because if you are looking for long term and big money, especially for infrastructure companies, so long as the anomalies exist people will hesitate to invest. That is the point we are making," Sinha said.

There are a lot of expectations from the Industry and the normal class people from the budget 2014 that it will come out with a clear solution for such kind of anomalies. A step forward in constructing a fair policy might do the needful.